Citadel, backed by Fidelity and Charles Schwab, launch an unregistered exchange with only 4 tokens,of which traders can't take custody/withdraw. Why would anyone use it, especially after the amount of traders who lost tons from the Gamestop/Robinhood fias

Citadel has launched a crypto exchange by the name of EDX. The exchange is backed by the likes of Fidelity,Sequoia Capital, Virtu Financial and Charles Schwab. The exchange is not registered with the SEC. It offers 4 tokens, none of which are currently classified by the SEC as securities. These tokens are Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. To be fair, these are some good choices of coins likely to be determined commodities but anything is anything with the SEC. It is interesting to see firms like Citadel , Charles Schwab and Fidelity seemingly take such a risk...unless they know something we don't.

Traders are also unable to withdraw/take custody of the coins, as trades take place at market prices and are only settled for cash with no token custody. It very much functions like stocks where the exchange handles all the trading activities associated the coin like settling and clearing trades and you only deal with entry price, exit price and profits(or loss).

On the topic of security/stock clearing, it is highly questionable for a firm like Citadel to be launching an exchange, particularly after the them probably being the root cause, or at least definitely one of the main causes of Gamestop(GME) traders looks lots of money in the Robinhood debacle. Citadel allegedly used their position as market maker to prevent traders buying more GME stock to bail out Melvin Capital, who were losing lots of money from shorting GME. They, along with another company, also literally bailed out Melvin with $2.75 Billion to prevent them from collapsing after the fact. Melvin Capital's founder is known as having worked for Citadel back in 2001. This is on top of the dark pools that Citadel runs where to take advantage of and profit off traders with zero accountability.

Regarding the new exchange EDX, they state "EDX will launch a clearing house to settle trades later this year". Citadel will now be responsible setting up a clearing house for trades, a very similar position to which they were in with Robinhood, where they will on again have power over user trade execution on top of running the exchange itself. Why should they be trusted to not to the same thing all over again, where they can just be more careful this time not to be caught.